National Savings and Investments

National Savings and Investments’ (NS&I) core remit is to raise cost-effective finance for the Government. In setting the interest rate on its products, NS&I must adhere to its operating framework. Specifically, this is to balance the interests of savers by offering a fair rate; the taxpayer by delivering cost-effective financing; and the financial services sector by acting transparently and supporting a fair and competitive market.

Green Savings Bonds (GSB) are a fixed-term savings product where deposits contribute to green initiatives as selected by the Government. GSBs sit alongside Green Gilts issued by the Debt Management Office, funds from which count towards meeting the Green Financing remit. The interest rate on GSBs is kept under regular review and changes are recommended by NS&I to HM Treasury as appropriate. In setting the interest rate, NS&I – as outlined above – seeks to balance the interest of savers, taxpayers, and financial services sector.

Interest earned on savings accounts, with the exception of ISAs, are subject to tax. Along with some other competitor accounts, GSBs are designed to be held for the full term and savers can only access their money, including compounded interest, at the end of the fixed-term, which is when any tax is due. HMRC outlines that any tax is paid on maturity when the saver benefits from the interest earned on the fixed-term product.